Co-founders of mellow explore their cross-border eCommerce success strategy

August 31, 2020 by
Sanne Leenders

We met with Neil Tunbridge and James Storie-Pugh, co-founders of mellow, to explore their cross-border e-commerce success strategy. Mellow is an online marketplace for CBD and wellness products. A platform that connects global brands to UK & EU customers. Beyond that mellow is also a destination where people can come and learn about CBD products and the brands behind them.

Tell us about mellow and how the brand came to fruition? 

James:Mellow brings together consumers and quality CBD (cannabidiol) products from around the world in one fully-managed marketplace. The main goal of the platform is also what inspired us to establish the company: meeting the need for a secure and trustworthy destination where online consumers can connect with and buy from the best brands from across the globe.  

Looking at the fast-evolving CBD market in 2019, we could see rapidly rising demand among consumers, but also a lack of credible and reputable online channels, so decided to build one of our own. The journey from concept to launch has moved extremely fast, helped by our shared expertise. Between us, we have over 40 years of experience in multiple areas — including international e-commerce, brand development, traditional retail, consultancy and marketplaces. We also have another joint venture, an online marketplace agency, Muloot. By tapping into this knowledge and relationships with innovative solution providers such as Acenda, we’ve been able to successfully make mellow a reality this year, despite the turbulent worldwide situation. Now, consumers can enjoy streamlined purchasing and take their pick from a closely curated selection of brands; such as Alpinols, Calm Recovery, Good Hemp, and Just Be CBD.”

What is your e-commerce marketplace model?

Neil: “Almost as soon as we began exploring possibilities for mellow it became clear that we would need to build our own marketplace. We wanted to establish an operating framework that not only worked within the broader CBD arena and its diverse mix of product verticals, but also one that offered an equally beneficial experience on all sides.

For example, a vital element of the mellow mission was keeping transactions running smoothly no matter where buyers or sellers were located, which is why we focused on building versatile payments into the heart of our system. We already had many of the core components thanks to our pre-existing cross-border banking solution; including the ability to onboard varied merchants and help them process payments efficiently across the UK and EU. Starting from this foundation, the development of unique multi-vendor and currency pay-out functionality then allowed us to provide the same flexibility for consumers; giving them the freedom to quickly and easily purchase products from different brands in numerous countries. 

But while driving large scale operations is an important part of the platform, we also recognise that each vendor has their own specific requirements. To ensure every business is equipped with the tools and support they need, we’ve created a suite of professional paid services spanning everything from advanced business intelligence (BI) analytics, VAT compliance and accounting to bespoke warehousing that’s fully integrated with the mellow application performance interface (API) and designed to provide a ‘fulfilled by’ solution from the outset.

Combined with our robust vetting procedures for onboarded brands, this means we have the crucial ingredients required for safe yet secure user and merchant-friendly CBD shopping.”

How has your suite of USP’s helped to attract brands from across borders?

James: “Mellow not only helps brands to navigate the highly fragmented CBD landscape, but also enhance their position and performance — and that has made the platform an attractive destination.

From a wider perspective, the one-stop-shop we offer for harnessing the power of e-commerce allows companies to effectively increase their online footprint. Plus, because we are purely digital, they can also avoid the usual costs of physical retail, which means both established and start-up brands can make the most of digital with minimal investment and risk. 

For those focused on entering new regions, the fact we operate on a direct-to-consumer basis also makes it easier to break through. For example, brands based in developed markets can leverage our adaptable payment tech and huge reach to engage new and emerging audiences around the world. Meanwhile, the same benefits also apply for nascent brands with the added bonus of multi-market insight that will allow them to grow.”

How have you navigated legislation within the CBD industry? And also helped your partner brands to do this?

Neil: “Finding the best way through complex regulation is certainly a challenge. In the UK, for example, CBD products must contain ‘no trace’ of psychoactive compound tetrahydrocannabinol (THC) to be traded legally and are governed by the Food Standards Agency (FSA), which also gives CBD extracts and supplements ‘novel food’ status. Other regions, however, have different rules and categorisations. 

At mellow, we strongly support progress towards a robust and universal CBD framework, and we are striving to fuel responsible practices by setting stringent individual benchmarks; created in partnership with our specialist advisor on CBD legal matters, Memery Crystal

One major part of mellow’s quality control is ensuring the companies we work with meet the highest available industry standards. That includes helping UK-based manufacturers and brands with their applications for FSA certification of CBD extracts and isolates — a requirement by the 31st March 2021. 

Another is the strict know your customer (KYC) process every brand undergoes before they are added to the platform. This is unique to mellow in the CBD space. In addition to complying with insurance requirements such as carrying their own liability cover, new brands must publish third-party lab reports that include a detailed overview of product sources, strength, and manufacturing methods. These requirements allow us to gain a complete view of the brands we host and pass that insight on to consumers who rely on us for accurate, granular information about CBD and positioning mellow as the go-to trustworthy source of a curated selection of independently verified, global CBD brands.”

What can we expect from mellow by the end of 2020 and beyond? 

James: “We’ve already achieved considerable success in a short period of time; we completed a round of angel funding pre-launch and have since onboarded 38 brands within 12 weeks of launching. But mellow’s ambitions for the immediate and longer-term future extend even further. We have multiple goals for the next 12 months, including further fundraising, building out customer facing solutions like subscription models, same day delivery options, expanding our warehousing operations, offering easier access to our brands and products, all while doubling our portfolio of global brands to over 85, and of course building the mellow team and brand at the same time.

Beyond 2020, we’ll also be extending the scope of mellow to be a platform for the wider wellness industry, supplying products to support a healthy and well-rounded lifestyle.”

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